Appeals Court Wrong on Right of Regulators to Commandeer Product Package

The U.S. Court of Appeals for the Sixth Circuit voted 2-1 this week in Discount Tobacco City v. U.S. to reject a First Amendment challenge to the federal law that requires cigarette labels to include graphic warnings that cover up to 50% of the packaging. The decision stands in sharp contrast to a decision last month by a federal judge in the District of Columbia that struck down the same graphic warnings requirement. The contrasting decisions can be explained in part by differences in the procedural postures of the two cases: the Sixth Circuit was ruling on a “facial” challenge to the statute, while the D.C. court had before it the specific graphic warnings that FDA intends to require. The decisions nonetheless illustrate the widespread disagreement among federal courts regarding the extent to which the First Amendment protects commercial speech.

The disagreement centers on the meaning of a 1985 Supreme Court decision, Zauderer v. Office of Disciplinary Counsel, and whether, under that precedent, laws requiring commercial entities to speak should be subject to a different level of First Amendment review than laws restricting their speech. The U.S. Supreme Court has long held that commercial speech – that is, speech (such as advertising) that proposes a commercial transaction – is entitled to an “intermediate” level of constitutional protection.

Under the Court’s Central Hudson test, the government may restrict truthful commercial speech only when it can demonstrate that its restriction directly advances a substantial government interest in a “narrowly tailored” manner. Zauderer held that such restrictions may take the form of government-mandated speech that companies can be compelled to add to their commercial speech in order to dispel the possibility of consumer deception.

Lower courts have advanced wildly conflicting interpretations of the level of judicial review to be applied to government-mandated “disclaimer” requirements. The Sixth Circuit held that Zauderer prescribes an extremely deferential standard of review and that Central Hudson’s narrow-tailoring requirement is inapplicable when determining whether compelled commercial speech violates the First Amendment. It held that mandated speech is permissible so long as it conveys factual information and is “reasonably related” to the government’s interest in preventing consumer deception. In the Sixth Circuit’s view, it is irrelevant that the mandated speech goes beyond a simple recitation of facts and is also intended to provoke a visceral response from consumers.

And, of course, there is no dispute that the federally mandated graphic warnings are intended to provoke visceral responses. The nine graphic images chosen by FDA include one of a man exhaling cigarette smoke through a tracheotomy hole in his throat, and another of a bare-chested cadaver lying on a table following an autopsy. It was the gruesome, judgmental nature of the images that caused Judge Leon of the D.C. federal court to conclude that the graphic image requirement violated the First Amendment.

The federal government asserts that despite the presence of health warnings on cigarette packages for nearly 50 years, some consumers do not fully appreciate the health dangers of cigarettes, and thus that stronger warnings are warranted. The D.C. court held (and Judge Clay, the dissenting Sixth Circuit judge, agreed) that Zauderer requires government-mandated disclaimers to be narrowly tailored, and that they cannot be deemed narrowly tailored when they go beyond a simple recitation of facts designed to prevent consumer deception.

Given the widespread disagreement among the lower federal courts regarding the meaning of Zauderer, the Supreme Court needs to address the issue in the near future. Moreover, Supreme Court precedent suggests an obvious answer to the controversy: the government may not require product manufacturers to display the sorts of graphic images at issue here. At least since the 1942 flag salute case, the Supreme Court has been highly wary of any government efforts to compel speech – indeed, more so than in cases involving speech restrictions. Zauderer needs to be understood in that context. In order to prevent product promotion from misleading consumers, Zauderer allows the government to compel product manufacturers to add fact-based disclaimers to their promotional materials.

But the sole reason for applying a somewhat-relaxed First Amendment standard to commercial speech restrictions is to ensure that consumers are not being misled. As the D.C. court held, once the government speech mandate goes beyond a recitation of facts and compels a speaker to convey the government’s message (in this case, “Don’t smoke”), the mandate should be subjected to the strictest of First Amendment scrutiny. The federal government is free to use its own resources to spread its anti-smoking message. But the First Amendment does not permit it to force others to spread the government’s gospel.